Oil patch gas flaring continues to go up

A flare burns gas at the Brown Trust oil lease near Cotulla on Highway 97 in La Salle County. ﻿

Photo: Kin Man Hui, Staff

SAN ANTONIO - Gas flares in the Eagle Ford Shale burned more than 20 billion cubic feet of natural gas and released tons of pollutants into the air in the first seven months of 2014 - exceeding the total waste and pollution for the entire year of 2012.

New records analyzed by the San Antonio Express-News show that flaring in the oil patch has continued to increase in the Eagle Ford, an upward trend first revealed in a yearlong San Antonio Express-News investigation called Up in Flames that was published in August.

The Express-News obtained new flaring data from the Railroad Commission of Texas, which oversees the oil and gas industry. The updated database shows that from January to July, energy companies flared and wasted enough natural gas to fuel CPS Energy's 800 megawatt Rio Nogales power plant during the same seven-month period.

Lacking permits

The newspaper also found some of the top sources of flaring in 2014 lacked state-mandated permits to flare natural gas. Railroad Commission spokeswoman Ramona Nye said Friday the agency sent violation notices to three energy companies after the Express-News asked about their permitting status.

The agency said the sites that lacked flaring permits included an oil lease in La Salle County called Brown Trust, a tract of scrub brush and oil tanks near the county seat of Cotulla on Highway 97. Flares at the lease burned more than 250 million cubic feet of gas in 2014, nearly a third of its overall gas production.

The operator of the lease, Carrizo (Eagle Ford) LLC, last week did not return phone messages.

"The commission expects all operators to fully comply with all commission rules including our flaring rules," Nye wrote in an email to the Express-News. Violators could be fined or blocked from selling their oil, Nye wrote. She said the agency sent nearly 300 other warning letters in the past five months to bring other companies into compliance.

The newspaper's analysis focused on casinghead gas, which comes from oil wells. It's the primary source of flared gas in the Eagle Ford as oil companies race to drill in the shale formation, roughly an hour's drive south of San Antonio.

Collectively, the flares spewed roughly 14,000 tons of air pollutants through this July, including volatile organic compounds, which can produce ground-level ozone, and a precursor to acid rain known as sulfur dioxide.

That's more than 10 times the amount of pollution released during all of 2012 by Valero Energy's oil refinery in Three Rivers.

'Outrageous'

Experts say the plummeting price of oil probably won't stifle production in the Eagle Ford anytime soon. That means the volume of gas flared in 2014 could stay on pace to exceed flaring levels in 2013, when oil and gas companies burned 35 billion cubic feet of the irreplaceable fossil fuel.

"The increase in the amount of flared gas is outrageous but predictable," said Tom "Smitty" Smith, state director of the consumer watchdog group Public Citizen. "Texas regulators have a long history of promising reductions that don't materialize because the growth in the number of rigs is outstripping the number of pipelines being built."

Omar Garcia, president and CEO of the industry's South Texas Energy & Economic Roundtable, said there were promising signs in the latest batch of flaring figures.

In raw numbers, the volume of flared gas continued to grow in 2014 as production skyrocketed in the Eagle Ford. But the newspaper's analysis also showed the overall rate of flaring dropped to nearly 6 percent of total production in the first seven months of 2014.

That's the lowest rate of flaring in the shale since the same seven-month period in 2011, when more than a tenth of the natural gas was lost to flaring in the Eagle Ford.

"We are pleased to see the evidence of our companies' dedication and investment in decreasing flaring percentages in their Eagle Ford operations," Garcia said in a written statement. "The use of equipment like vapor recovery units, building more central facilities and building more pipeline infrastructure can be attributed to this percentage decrease."

The market value of the lost natural gas was roughly $100 million, based on monthly averages at the Henry Hub, a southern Louisiana location that's the benchmark for gas pricing. Texas doesn't collect taxes on flared gas, and in most cases mineral-rights owners don't collect any royalties from it. Tax rates can vary from well-to-well in Texas because of exemptions, leaving the amount of lost severance taxes unknown.

Have little choice

Oil and gas companies told the Express-News that they don't want to flare the natural resource but have little choice.

At the "Burns Ranch A" lease in La Salle and Frio counties near the town of Dilley, Goodrich Petroleum flared more than 430 million cubic feet of gas - about a fourth of its production, making it one of the top sources of flaring so far in 2014.

Company spokesman Daniel Jenkins didn't respond to emails. But he said in a past interview that gas pipelines at the ranch can't handle all the production.

"We have no desire to flare gas," Jenkins said. "But unfortunately, we are constrained by circumstances in the midstream infrastructure that's in place - or not in place."

The goal of flaring is to burn off impurities. But flares also generate air pollution and carbon dioxide, a greenhouse gas that scientists say contributes to climate change.

Sometimes, raw gas is vented, unburned, straight into the Texas sky. Most of that is methane, a greenhouse gas that traps 20 times as much heat in the earth's atmosphere as carbon dioxide.